NO.PZ2024101802000017
问题如下：
Discuss how the benefits of tax deferral can be overcome by finding mispriced investment opportunities.
选项：
解释：
The benefits of tax deferral can be overwhelmed if investments taxed on an accrual basis offer sufficiently high risk-adjusted returns. That is, purchasing securities sufficiently below their intrinsic value (or short selling securities sufficiently above intrinsic value) can overcome tax drag even if the investment is taxed heavily on an annual basis.
The benefit of deferred tax investment would be overcome if the investment taxed on accrual basis provide a higher risk-adjusted return.
For those investment opportunity that invest in highly undervalued stock or short in highly overvalued stock, the return can overcome the tax drag effect of accrual tax basis. In this case, the investor would not benefit from the deferred tax treatment.
